Jefferies sees multiple growth paths for Birkenstock stock

Investing.com -- Jefferies analysts visited a Birkenstock store in New York City and found the company's Arizona sandal remains central to the product lineup, supporting their view that core products continue to drive steady demand.

The Arizona sandal occupied prominent space throughout the store and was available in multiple materials, colors, and price points. The analysts view the Arizona sandal as a key contributor to Birkenstock's ability to generate consistent demand.

The product range extended beyond traditional sandals. Closed-toe styles, including Boston, Naples, and Utti, occupied significant space throughout the store alongside seasonal materials and new colorways. The expanding product range supports management's view that category expansion is broadening usage occasions and helping attract new consumers.

The store presentation highlighted the breadth of the product range and the company's investment in customer experience. Management recently noted that direct-to-consumer sales outpaced business-to-business sales for the first time in two years, supported by growth in retail stores and improving digital conversion.

Jefferies believes the combination of a core product, expanding growth opportunities, and increasing direct-to-consumer penetration positions NYSE:BIRK to sustain double-digit growth and continued cash flow generation. The firm noted EBITDA margins above 30% and views the risk-reward ratio favorably.

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